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Who Pays for What in Real Estate?

by Guest Post on May 15, 2012

One very common question of real estate transactions is, "Who pays for what in a real estate transaction." Below is a list to give you an idea of some of the common expectations, but this list will vary from region to region. Also, if it's a buyer's or seller's market could possibly change the common fee responsibility.

Seller or Buyer

The SELLER could generally be expected to pay for the following.

  • Real Estate Commission
  • Document preparation fee for Deed
  • Documentary transfer tax
  • Any city Transfer/Conveyance Tax (according to contract)
  • Any loan fees required by the buyer's lender
  • The payoff of all loans in the seller's name (or existing loan balance if being assumed by buyer)
  • Interest accrued to lender being paid off, Statement Fees, reconveyance Fees, and any Prepayment Penalties
  • Termite Inspection (according to contract)
  • Termite Work (according to contract)
  • Home Warranty (according to contract)
  • Any judgments, tax liens, etc., against the seller
  • Tax proration (for any taxes unpaid at the time of transfer of title)
  • Any unpaid Homeowner's dues
  • Title Insurance Premium
  • Recording charges to clear all documents of record against seller
  • Any bonds or assessments (according to contract)
  • All delinquent taxes
  • Notary Fees
  • Escrow Fee

 

The BUYER could generally be expected to pay for the following.

  • Title Insurance Premium Escrow Fee
  • Notary Fee
  • Document preparation (if applicable)
  • Recording charges for all documents in the buyer's name
  • Termite Inspection (according to contract)
  • Tax proration (from date of acquisition)
  • Homeowner's transfer fee
  • All new loan charges (except those required by the lender for the seller to pay)
  • Interest on a new loan from date of funding to 30 days before the first payment date
  • Assumption/Change of Records fees for takeover of existing loan Beneficiary Statement Fee for the assumption of existing loan
  • Inspection Fees (roofing, property inspection, geological, etc.)
  • Home warranty (according to contract)
  • City transfer/Conveyance Tax (according to contract) Fire insurance Premium for the first year

Residential and commercial real estate is very different in one way but very similar in the other. The fees paid for commercial properties are way higher than for residential and they depend on a real estate agent’s ability to market the property. So if you are planning to sell your commercial property fast be aware of some of the fees you’ll need to pay to your broker when the transaction finalizes.

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